KEY POINTS:
Stretched Auckland City households are being offered some rates relief after a council decision to borrow $1.35 billion to fund capital works.
Instead of the projected 9.8 per cent rates increase this year, household rates will go up 5.4 per cent under a plan to begin a 10-year
borrowing programme with a loan of $23.3 million. The average household rates bill will go up from $1420 to nearly $1500.
Auckland City is not the only council responding to last year's anger over big rates increases by holding its overall rates take from households and business to 3.6 per cent.
Other councils in the Auckland region, such as North Shore City and Franklin and Rodney Districts, are seeking more modest increases than last year. Manukau City and the Auckland Regional Council are sticking with last year's increases of 5.9 per cent and 4.9 per cent respectively.
The centre-left-controlled Auckland City Council has been widely condemned for increasing the rates burden on households by 24 per cent in two years. Finance committee chairman Vern Walsh said the decision to take on debt had nothing to do with looming local body elections in October.
Mr Walsh did acknowledge that rates increases over the past two years had affected some people more than others and the council was looking at ways to more evenly spread the burden of costs that were not going to go away.
Mayor Dick Hubbard said the council had big projects it wanted to get started, such as developing the waterfront and upgrading Aotea Square, but it would be unfair to fund those exclusively from today's rates.
"Every business knows that debt, when well managed, is a prudent way of progressing and growing," he said.
The last council sold off airport shares and pensioner housing to pay off debt and go for a zero net debt policy.
Citizens and Ratepayers Now councillor Doug Armstrong, who chaired the finance committee under former mayor John Banks, said the current council had been politically hurt by the magnitude of the rates revolt and was running scared in election year.
Mr Armstrong said the council was going down a "slippery slope" by removing the discipline of paying for capital works out of surpluses and other funding tools.
The debt policy will be discussed today at a budget meeting which will also discuss increases in development contributions to pay for the costs of growth.
RATES INCREASES
This year (proposed), Last year
Auckland City 3.6%, 6.8%
North Shore City 7.4%, 9.5%
Manukau City 5.9%, 5.9%
Waitakere City 6.7%, 6.8%
Papakura District 5%, 7.3%
Franklin District 4.8%, 8.3%
Rodney District 6.5%, 10.2%
NB: These figures are for the overall increase in rates.